Tesla (NASDAQ:TSLA) may see its core EV business facing some challenges, but its lofty valuation reflects confidence in future game-changers like the robotaxi and its advanced FSD (full self-driving) software. Investors are banking on these groundbreaking initiatives, but how significant will their impact be in the years ahead?
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Goldman Sachs’ Mark Delaney, an analyst ranked in the top 3% of Wall Street stock experts, expects the robotaxi business will begin commercial operations in the second half of 2026, generating around $115 million in revenue by 2027 while being “relatively neutral” to consolidated EPS.
The forecast assumes Tesla’s fleet will grow to 300 vehicles by the end of 2026 and 1,500 by the end of 2027. It also factors in an increase in daily trips per vehicle from 15 to 20 between 2026 and 2027 and an average price of just over $2.50 per mile in 2027.
Tesla has indicated it will launch the service in either Texas or California, with Delaney favoring Texas as the likely choice. Reports suggest ongoing discussions with Austin regarding self-driving technology, and Texas has less stringent permitting requirements compared to California.
Delaney thinks Tesla will probably use remote assistance and geofencing to support the service – approaches similar to those used by current robotaxi operators like Waymo, Baidu, and Pony AI, though these methods are not part of Tesla’s consumer FSD vehicles.
“We believe that the use of remote assistance and a narrow geographic environment could help to improve performance compared to Tesla’s full self-driving (FSD) software on consumer vehicles,” the 5-star analyst went on to say.
That said, based on personal experience, crowdsourced data, and third-party reviews, Delaney notes some big recent improvements to V13 of the FSD software compared to V12. That, he says, reinforces his view that Tesla is “one of the leaders in autonomous technology.”
Specifically, crowdsourced data shows that FSD V13 achieves approximately 400–450 miles between critical interventions, with 97% of drives avoiding such incidents entirely. Tesla reckons that FSD V13 could eventually reach around 10,000 miles per critical intervention. However, Delaney thinks there’s still “meaningful progress needed for FSD to become a situationally eyes off product.”
The analyst also thinks Tesla’s target of making FSD safer than human drivers by Q2 of this year won’t be met. Nevertheless, as its performance improves, adoption and monetization of FSD could increase and that could result in a boost to auto gross margins by 2026/2027.
“We believe long-term FSD monetization potential will not only depend on technical progress, but the degree to which Tesla’s software is differentiated vs. other alternatives (and the degree of competition and typical industry business models in China may make monetization more difficult in that region,” Delaney summed up.
Bottom line, for now, Delaney rates Tesla shares as a Neutral with a $345 price target, which factors in a 12-month drop of 16.5%. (To watch Delaney’s track record, click here)
The Street’s consensus price target is even lower, at $329.63, indicating the stock may be overvalued by 23%. Overall, Tesla holds a Hold consensus rating, derived from a mix of 13 Buys, 12 Holds, and 9 Sells. (See TSLA stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
